The Implications of the U.S.-China Trade Deal Revisited

PGIM Fixed Income

January 2020

By Nathan Sheets, PhD, Chief Economist and Head of Global Macroeconomic Research, and George Jiranek, Associate, Global Macroeconomic Research

The completion of the Phase 1 agreement marks a cease fire in the U.S.-China trade war, and the deal underscores several persistent issues that we considered in a white paper published in April 2019.

We find that China’s commitments to hike imports from the United States range from those that will be challenging to those that will likely be even more difficult.

These concerns notwithstanding, we believe the agreement greatly reduces the probability of an escalating trade war during the year ahead, which should be positive for economic confidence and the markets.




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